Infection of differentiated mouse embryo cells by simian virus 40 (SV40) leads to the production of the early mRNAs and the tumor (T) antigens that they encode. In contrast, undifferentiated F-9 murine teratocarcinoma cells do not support these early stages of the SV40 cycle. This block results, at least in part, from the inability to accumulate stable processed early SV40 mRNAs. It has recently been shown that vitamin A and its derivatives can induce in vitro differentiation of stem cells. Undifferentiated F-9 cells, upon treatment with a low concentration of retinoic acid, exhibited pronounced morphologic changes as well as the appearance of the H-2 surface antigens. After differentiation, the susceptibility of F-9 cells to SV40 infection could be demonstrated by the appearance of large T- and small t-antigens, as shown by immunofluorescence and immunoprecipitation. Furthermore, S1 nuclease mapping of early SV40 transcript confirmed the presence of the two spliced early mRNAs. These results indicate that the undifferentiated F-9 stem cells contain the genetic information needed for generating stable processed early SV40 mRNAs but are blocked in the production of functional species.